Fuel prices on the local market are likely to witness some marginal increase in the first pricing window in September, Institute for Energy Security (IES) has predicted.
Brent crude was trading at US$45.38 on Tuesday while West Texas Intermediate (WTI) was selling at US $43.00.
The IES attributed the expected increase in fuel prices on the local market to the appreciation in the prices of International Benchmark-Brent Crude and depreciation of the local currency Cedi against the U.S Dollar.
Brent crude price remained above the US$44 per barrel mark for the pricing-window under assessment. On 25th August, 2020, Brent crude rose to US$45.86 a barrel, the highest since March 6. This steady gain can be attributed to declining inventories, recovery on the stock market and the continuous easing of restrictions on economic activities around the world. Following this, Brent crude appreciated by 2.45 percent from US$44.13 per barrel recorded at the end of the first pricing-window of August to close at US$45.21 per barrel on average terms at end of the second pricing-window in August 2020.
“Taking into consideration the appreciation in the prices of International Benchmark – Brent Crude (2.45%) and refined product – Gasoline (6.23%) as well the 0.17% depreciation of the Cedi against the U.S. Dollar; the Institute for Energy Security (IES) foresees prices of fuel on the local market loosing stability and going up marginally,” IES said in a statement.
Below Is The IES’s Full Statement
FUEL PRICES TO RISE SLIGHTLY IN THE 1ST HALF OF SEPTEMBER 2020
REVIEW OF AUGUST 2020 SECOND PRICING-WINDOW
Local Fuel Market Performance
Fuel prices on the local market remained stable in the Pricing-window under review. Petroleum product prices within the second Pricing-window of August 2020 saw majority of the Oil Marketing Companies (OMCs) maintaining the prices of Gasoline and Gasoil. The current national average price of fuel per litre at the pump is pegged at GH¢4.80 for both Gasoline and Gasoil.
Over the past two weeks, Santol, Benab Oil, Nick Petroleum, Radiance, Champion and Cash Oil, joined Zen Petroleum as OMCs spotted by IES Market-scan as trading with the least-rates for Gasoline and Gasoil within the downstream oil market.
World Oil Market
Brent crude price remained above the $44 per barrel mark for the Pricing-window under assessment. On 25th August, Brent crude rose to $45.86 a barrel, the highest since March 6th. This steady gain can be attributed to declining inventories, recovery on the stock market and the continuous easing of restrictions on economic activities around the world. Following this, Brent crude appreciated by 2.45% from $44.13 per barrel recorded at the end of the first Pricing-window of August to close at $45.21 per barrel on average terms at end of the second pricing Pricing-window in August 2020.
S&P’s Platts benchmark for fuels shows average Gasoline price appreciated by 6.23% to close at $407.86 per metric tonne, from a previous average of $383.94 per metric tonne. Meanwhile Gasoil declined by 0.11% to close trading at $370.55 per metric tonne, from a previous average of $370.96 per metric tonne.
Local Forex
Data collated by IES Economic Desk from the Foreign Exchange (Forex) market shows the Cedi depreciated by 0.17% against the U.S. Dollar, trading at an average price of Gh¢5.74 to the U.S. Dollar over the period, from a previous rate of Gh¢5.73 recorded in the first Pricing-window of August, 2020.
PROJECTIONS FOR SEPTEMBER 2020 FIRST PRICING-WINDOW
Taking into consideration the appreciation in the prices of International Benchmark – Brent Crude (2.45%) and refined product – Gasoline (6.23%) as well the 0.17% depreciation of the Cedi against the U.S. Dollar; the Institute for Energy Security (IES) foresees prices of fuel on the local market loosing stability and going up marginally. However, competition between Oil Marketing Companies (OMCs) to control and gain market shares could result in selling price of fuels remaining unchanged within the first Pricing-window of September 2020.
Signed:
Raymond Nuworkpor
Research & Policy Analyst, IES
